North Hills developer Kane Realty is seeking to redevelop a 2.5-acre site in downtown Raleigh’s warehouse district into a mix of offices, apartments and retail shops.
Kane filed a rezoning request with the city last week for eight parcels owned by Dillon Supply Co. John Kane, Kane Realty’s CEO, said his company has put seven of the parcels under contract and is partnering with Federal Capital Partners on the project.
The property is kitty-corner to the technology company Citrix’s new headquarters, which is itself a former Dillon Supply warehouse. It includes the entire block bordered by W. Martin, S. Harrington, S. West and W. Hargett streets.
Kane said initial plans for the block call for two towers – one office, the other apartments – as well as a parking deck and ground floor retail space. The requested rezoning, “DX-20,” sets a height limit of 20 stories and requires the building stand close to the street. The rezoning would allow retail, office and residential uses.
Kane said his group would try to preserve as much of the 67,000-square-foot Dillon warehouse building as possible.
“I think we’d try to do something that would fit into the warehouse district. Something that would feel a little out of the box, not your traditional office tower,” Kane said. “Something a little bit different. Maybe not as out there as Citrix, but something that would fit.”
The development would mark another evolution for the city’s warehouse district. Galleries and restaurants first repopulated the area and more intensive redevelopment has followed.
Just last month a New York real estate firm acquired Citrix headquarters for $68.5 million after developers spent tens of millions of dollars renovating the warehouse to Citrix’s specifications. The deal set a Triangle office market record on a price-per-square-foot basis.
“I think the warehouse district is really an up-and-comer. Citrix has really made a dent there. ... It’s really unique and it’s fantastic,” Kane said. “ ... We’re believers in it and think that hopefully we can get the Dillon project done and that along with the train station could really transform that whole area.”
The $73 million Union Station train hub – which is being funded by a combination of federal, state and city dollars – is scheduled to begin construction in March at 510 W. Martin St. and is expected to be ready for its own grand opening in 2017.
The Dillon project would also represent another opportunity for Kane to make a major imprint on Raleigh’s landscape.
In addition to the wildly successful North Hills area, Kane is also now building the Stanhope Center on Hillsborough Street near N.C. State University. The $70 million project, which will provide housing to 800 students and include about 30,000 square feet of retail, is scheduled to open in time for the 2015-16 school year.
Federal Capital Partners also partnered with Kane on the Stanhope Center, as well as several other apartment projects at North Hills.